The European Union, United States and United Nations have lifted sanctions related to Iran’s nuclear activities following a report by the International Atomic Energy Agency (IAEA) which confirms that the country can no longer acquire nuclear weapons.

In the report, submitted Saturday, January 16, to the UN’s Security Council, IAEA director general Yukiya Amano said: “Today, I released a report confirming that Iran has completed the necessary preparatory steps to start the implementation of the Joint Comprehensive Plan of Action (JCPOA).”

As a result, the EU published a decision bringing EU sanctions relief into immediate effect. “While certain export restrictions and an asset freeze (with many fewer targets) will remain in place, most of the EU’s prohibitions and restrictions on transactions with Iran have now been removed,” a legal update from law firm Dechert reads.

UN Resolution 2231 (passed in July 2015 upon the signing of the JCPOA) states that all past UN Resolutions relating to Iran’s nuclear programme will be terminated as of Implementation Day, and therefore took effect yesterday. Other countries are now free to reduce their sanctions on Iran to align with the new UN requirement. “It is largely expected that most will do so quickly, although some, including notably Canada, have expressly reserved their position,” Dechert adds.

In the US, President Barack Obama signed an executive order lifting some of the US economic sanctions on Iran, as announced by the White House. However, only ‘secondary sanctions’ have been lifted, meaning that most of the country’s sanctions against Iran remain in place, including restrictions on US dollar transactions.

The US timetable will be largely dependent on and driven by the prevailing US political climate. John Forrest, DLA Piper

Moreover, corporates should be cautious until the US sanctions removal has been ratified – which could take months, as the deal with Iran has sparked fierce debate in both chambers of congress.

“It appears highly unlikely that US sanctions relief will be implemented in line with any early EU timetable for termination and as yet we do not know when this is likely to happen. The US timetable will be largely dependent on and driven by the prevailing US political climate,” John Forrest, head of international trade in London at law firm DLA Piper, explains.

For more information on what the lifting of sanctions means for you, read our legal FAQ.

The news was hailed both in Iran and in Europe, where corporates had been keen to maintain a trade relationship even under the sanctions (see the German example here). The reopening of trade and, more importantly, financial channels will open up opportunities in a number of sectors, including oil and gas, aviation, infrastructure and healthcare (watch our Iran opportunities video here).

Arash Shahraini, member of the board of the Export Guarantee Fund of Iran (EGFI), tells GTR: “With the full implementation of the JCPOA, Iran’s market will be opened to the world as a big and untouched market – the second after the dissolution of the Soviet Union. This will provide huge opportunities for the traders and investors of both sides in a way that some even call the Gold Rush.

“Iran’s exposure with all ECAs/financiers of the world was US$30bn before the sanctions, and now it is just US$4bn. It shows that even in difficult times when normal channels of payment were blocked, Iran was committed and could pay the major part of its debts. For some outstanding ones, the Iranian sides could make the payment with the opening of the channels of payment. All in all, Iran is a good risk and it will come back to play in coming day.”

ECAs have started to resume their activities with Iran: UK Export Finance (UKEF) has reintroduced cover, which is available on a case-by-case basis in pounds Sterling and euros. Within this, it will also make available a £50mn facility guaranteeing payments to UK professional advisory service providers advising the government of Iran.

Going back to normal will most probably take a few months, since the connection to the Swift system and getting access to our assets in Europe will take some time. Ali Mehrpour, Bank Tejarat

Ali Mehrpour of Iran’s Bank Tejarat adds: “Of course we believe that the lifting of the sanctions will increase the volume of the business of our bank in great scale, maybe not exactly within two or three months but after five or six months there will  be considerable changes in the amount and volume. Going back to normal will most probably take a few months, since the connection to the Swift system and getting access to our assets in Europe will take some time.”

The removal of sanctions had been eagerly awaited in both Iran and Europe since the signing of the Joint Comprehensive Plan of Action (JCPOA) by Iran and the P5+1 (formed of the five permanent members of the UN Security Council – the US, Russia, China, Britain and France – plus Germany) on July 14, 2015, after two years of negotiations.

Some commentators, particularly in the US, believed it would take up to a year to reach Implementation Day, bringing it to Q2 2016, but Iranians were confident the sanctions would be lifted by the end of January.

Iran’s economy suffered tremendously under the sanctions regime, but, as GTR found out in its special Iran report, trade continued and even managed to grow, proving the resilience and creativity of the country’s corporates. The lifting of sanctions will mainly bring financial relief to exporters, with trade transactions under the limitations estimated to cost 7 to 8% more than usual, as they had to be performed outside of the banking system.